I have a library of Steam games of which I haven't played half. I have lots of games installed on my iPad that I haven't had the time to play yet. I'm playing only a few Facebook games out of thousands available. My Playstation 3 is collecting dust, because I don't even keep up to date what games come out on that platform. And I don't even have an XBox or Wii. There are simply too many games coming out for me to play them all. We always talk about how the devs of one MMORPG can't possibly create content fast enough to please the contentivores, but in aggregate all game developers together are producing far more content and far more games than a person could possibly play.

For MMORPGs that has two major consequences, which are related: If you play just one MMORPG all the time, you are missing out on a lot of other games. And because people don't want to miss out on potentially fun new games while grinding in some MMORPG, MMORPGs can't seem to hold onto their players any more. It is the law of supply and demand, in this world of over-supply of games it becomes hard to make money with games. You can play a lot of games on various platforms for free, mobile games usually just cost a few bucks, and you can get PC games from this year at a Steam sale for half price or less.

Sooner or later this is going to end up in a huge crash like the one we had 30 years ago. Wikipedia says about the 1983 crash: "There were several reasons for the crash, but the main cause was supersaturation of the market with hundreds of mostly low-quality games which resulted in the loss of consumer confidence.". Doesn't that sound familiar? Only the "hundreds" part today has to be replaced by "thousands". There is simply a limited supply of people with money and time to spend on games, and too many companies producing too many games to go after that limited pool. And if you can't make big bucks with your big budget game any more, the budget of your next game will be smaller, and quality might get lower. At some point the market is so saturated by cheap Free2Play games, that another $300 million triple-A game is out of the question.

I'd say enjoy the affluence of cheap games while they last. But basic economics tells us that they won't last forever.

Steam, KickStarter, Indiegogo and many other "platforms" give the false idea that making a (good) videogame is just a matter of collecting some fans and raising some initial funds. That's all. The truth is, a LOT of developers get lost half the way due to real-life problems, lack of time, incompetence and many other reasons.

I've been working on a videogame too in the last months but I wouldn't jump on the Kickstarter bandwagon unless I am 99.9% confident I can deliver the final product in a reasonable amount of time.

The supply-deman law always works. Back in time the PC platorm had very few titles, I still remember the joy of playin SimCity and Populou on my IBM PS2... while my friends where swimming in a sea of titles on their Amiga/C=64 :-)

1) The platforms will buy a bit more time. Sort of like how the media companies liked to sell us new libraries of CDs/DVDs, the console->steam->iPhone->iPad is obscuring things a bit. Perhaps someone with 10 unplayed steam, 10 unplayed iphone and 5 unplayed ipad games feels less saturated than having 25 xbox or steam games unplayed?

2) cost matters: a $0.99 ipad game you played for 2 hours does not add much to the perceived saturation - you consumed it, got your money's worth. Last month's $60 Next Big Thing becoming this months OMGWTF disappointment imfluences consomers more I think.

3) It may also be the criteria needs to change as habits change: e.g., there may be a future WoW expansion that has both 15 and 5 million subs over its life because sub patterns are changing.

4) While I agree with your analysis, I don't think it is too imminent: eventually there will be new consoles and the land rush will begin. Then the crash can occur, even harder.

5) Another unknown is "passes" - pay $ and get all SoE or Blizzard or XBox Live games. It will be much tougher to sell your mediocre game if the customer already has dozens of mediocre alternative available for no additional charge.

I remember so many titles coming out that I had little to no interest in playing (such as Burgertime), and there were too many platforms for the market to handle. And if you wanted to be a major player, you also had to port your game to the home computers of the era: TI-994/A, Atari 400/800, Commodore 64, IBM PC, Apple 2, among others.

That was all too much for the market to handle.

I'm thinking that the difference between then and now is that with the internet a company can target users better than ever before. In the 80's there was too much reliance on "get it out there and it'll sell", but knowing your market and targeting your players are two different things. PC gamers != console gamers. MMO players != FPS players. Fantasy players != sports gamers. And so on and so forth. If your company is smart and doesn't try to overreach, you can make a decent living as a development house. The trouble comes in trying to do too much at once; it may advance the state of the art, but it may also create a loss leader.

But that crash wouldn't necessarily be felt by the customers. I consider the gaming market to be big enough to make Sturgeon's Law moot; Even if 99% is crap, there's still enough gems out there to fully occupy your time. Especially when you have access to the long tail of excellent games via backwards compatibility, emulators, remakes and rereleases.

I too have felt that the current glut of gaming goodness is too good to last. I have been gaming a long time and I have never before had such an abundance of top quality games to play for so little cost.

In fact the only hole I would pick in your argument relates to quality. There are many many excellent games being released at present at every level of the market from pixelated indie games to mega budget AAA. The market may crash due to oversupply but it won't crash due to lack of quality.

The nature of a coming crash is also far from clear. Even if the mega publishers go to the wall will that bring down the indies or will that create space for indies to thrive?

Game design has changed dramatically. To the point where we find ourselves discussing the definition of the term "game." In the case of MMORPGs you have persistent worlds with no win condition. No "the end."

New releases are still expensive (these started dipping in 1983 before the crash). You may have the wisdom to wait until they are at the level you value, but games like CoD can still set sales records with an MSRP greater than $50.

The generation buying games in 1983 was the first, in some respects. My children are now playing, and with the enablement of social connections to share accomplishments and play games together, are playing more with their peers than I ever did in 1983.

Well I partially agree. I think that the traditional MMO is too low quality to be attractive to the casual player with so many other better options out there.

On the other hand, there's a difference between now and 1983--- back then the garbageware cost the equivalent of $100 in today's money. Now the garbageware is cheap or free. Consumer confidence isn't going to be undermined by low quality cheap games, because people expect cheap games to be disposable.

So what he have now is a highly competitive environment for game developers, and the normal distribution of quality for the consumer. Video games are the same as any entertainment product; there's a lot of crap, lot of mediocrity, and a bit of quality. The existence of Harlequin romance novels doesn't undermine consumer confidence in Tolstoy.

Basically I think the MMO genre is in for some diminishment because I think the majority of ex-WoW players are permanently out of the genre and once WoW finally dies the genre will back to it's niche roots. Titan better be mind blowingly innovative or MMO's will be toast for a long time.

Most of the free or mobile games aren't really competing or intending to compete with console or PC games, though, and Steam sales don't terribly expect you to beat the games -- they exist for the game company to get revenue from the extremely price-averse, rather than the content-aware.

It's also worth noting that the crash of 1985 was in many ways a console crash and not just a video game crash. The computer game market did much better at the time period. Entertainment dollars are fungible, but we're talking a very large market.

That's not to say a general video games crash is impossible, but given the information I'd expect failures more at specific points -- market fragmentation slicing up publishers, the MMO market going sideways.

Back then the market was based on consoles that had to be sold first and supported by game sales. Then home computers started coming out. Software developers didn't need to make hardware. That was surely one cause of the crash.

Nowadays home computers are ubiquitous and development tools are good. There will always be good games coming out because the entry cost is low. A crash similar to 1983 is impossible.

$300M games might well go out of fashion, of course, and consoles could crash again. The latter would just mean *more* games for me, as I don't have a console and all titles would have to come out for computers and tablets.

I think there could be a crash but not in the overall industry as it did before. I think it will be digital distribution that could crash. There's so much competition now, the average PC player is spending much less than $60 yet publishers are still budgeting development on $60 sales.

Combine that with publishers creating their own exclusive platforms (Origin being the first) and a lot of the really popular games are not available for third-party websites to sell. Just one big one going down and people losing all their games is enough for consumers to stop buying games online or at least be very hesitant about it.

It's not going to disappear though. I just see the digital market as being big publisher websites with their games exclusive to their site, with maybe a few third-parties that cover niches in the market (indie games only, strategy games only, etc.)

In almost all situations each platform available now possesses the ability to measure how much time and/or money a person spends playing game "X". These kind of metrics didn't exist in the early 80's, so oversaturation should NOT occur since the majority of companies/publishers have the ability to look deep into these numbers and determine which games(genres, types and revenue generation models) are actually successful and worthy of continued funding/development.

If anything crashes, it will be due to the revenue generation models that have been thrust down players throats in the past few years - in what has historically been an entertainment market where people spend their precious free time relaxing.

I'm mainly pointing the finger at the F2P model here, and there's no big secret where the F2P model is concerned, where only around 5% of the playerbase (Note 1) account for revenue. The ethics involved with making F2P games and how they are targetted at specific types of players is now being questioned by prominent gaming industry pundits such as Nik Davidson, a Senior Designer at Amazon, when he said "We like to think that the ones spending vast sums on these games are sons of Dubai oligarchs, but we have the data to prove that they're not, and that they probably can't afford to spend what they're spending" at this years GDC online.(Note 2)

There is a certain psychology at work when F2P games are made, and part of those involved with the industry are publicly and openly admitting that there are ethical questions raised when considering how much data developers are now able to get. I have a sneaking suspicion that even the developers are realizing that sooner or later they're going to run out of 1 percenters who have enough money to sustain the other 95-99% of players.

I have hopes though, and as gamers become better educated about how F2P works, the F2P model crash will bring about the downfall of those very companies who have foolishly adopted it. If companies like Zynga, and others who embrace the F2P concept fail, it wont be considered a crash so much as a long overdue reckoning.

Noted Sources:

1)Zynga admits that only 5% of players actually pay: http://live.wsj.com/video/digits-how-many-people-pay-to-play-zynga-games/2F348BE3-8149-4D41-AA4F-104555C7073A.html#!2F348BE3-8149-4D41-AA4F-104555C7073A

The situation in the 80s and today is IMO incomparable both in terms of hardware & software. You don't need an uber expensive computer or video game console anymore. PCs are now ubiquitous, and games can be played on phones which everyone has. The number of competing consoles has settled and the time lapse between them is great.

Back in the 80s games were solely made for gamers. Today, they are arguably made for people, many of which would not identify themselves as "gamers." On the hardcore gamer side, people seem just as eager as ever to buy up the yearly rehash of CoD/BF.

I'd argue the mmorpg crash happened with SW:ToR.

The genre will see major casualties in 2013...ccp and funcom will be casualties...maybe ncsoft as well?

GW2 possibly outsold SWTOR. ANet even went as far as to disable digital sales for a few weeks because it was selling too well. I don't think there was a general MMORPG crash with SWTOR. We've also seen the same tourist pattern with every new MMORPG in the last few years. Personally, I believe this is just a consequence of MMOs becoming mainstream. Most people abandon single player games after about a month max too.

EVE Online has been quite successful for CCP with a relatively stable population for many years. Anyone other than Blizzard would love to have their numbers after a decade. And NC is a goliath in the East. I predict B&S will initially be very popular in the West just like Aion was.

Another data point for the "it's different now than it was back then." The Atari 2600, the star of the video game crash of the 80s, sold about 30 million units in its lifetime. Compare this to the Nintendo 3DS, which has sold about 22.2 million which people think has been slow. (Or consider the Nintendo DS, which has sold 152.5 million, but that's several different markets.) This doesn't even cover the millions of PS3, XBox 360, Wii, or other consoles out there. And, how many millions of smart phones are used to play games regularly?

The reality is that there are a LOT more gamers out there now than there was back then. You might find there are more games than you can consume, but for every game you don't care for there may be enough other people out there that are enthusiastic about that game. And, for a lot of games, the fact that you paid for it is all the company really needs, isn't it?

Ultimately, I don't see another crash like we saw in the 80s. (Not that I gave a damn back then, anyway, do you know how many cheap game I picked up? ;)